Question

Ive asked this one before but the answers and formulas were wrong so i couldnt use it to figure out how to work them. Can someone please help

Homework: Chapter 3 Homework Score: 0.19 of 1 pt 5 of 5 (5 complete) P3-51 (similar to) The Alves Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: (Click the icon to view the budgeted income statement.) Read the requirements Requirements X Requirement 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. Begin by determining the sales mix. For every 2 deluxe unit(s) sold, standard units are sold. 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. 3. Suppose 200,000 units are sold but only 25,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson this problem? Print Done Done x Data Table Standard Carrier Deluxe Carrier 120.000 80.000 Total 200,000 Units sold Revenues at $25 and $40 per unit Variable costs at $15 and $25 per unit $ 3,000,000 $ 1,800.000 3,200,000 $ 6,200,000 2,000,000 3,800,000 $ 1,200,000 $ 1,200,000 Contribution margins at $10 and $15 per unit 2,400,000 1,275,000 Fixed costs $ 1,125,000 Operating income Print Done

Answer 1

Part 1
	Statement	Standard	Deluxe	Total
A	Units Sold	120,000.00	80,000.00	200,000.00
B	SP per unit	25.00	40.00
C	Variable cost per unit	15.00	25.00
D	Contribution per unit	10.00	15.00
E	Sales Mix Percentage (120000/200000,80000/200000)	0.60	0.40
F	Weighted Average CM	6.00	6.00	12.00
G	Fixed Cost			1,275,000.00
H	BEP in units (G/H)			106,250.00
Part2		Standard
A	Contribution per unit of Standard	10.00
B	Fixed Cost	1,275,000.00
C	BEP in units assuming only Standard was sold (B/A)	127,500.00
		Deluxe
A	Contribution per unit of Delux	15.00
B	Fixed Cost	1,275,000.00
C	BEP in units assuming only Delux was sold (B/A)	85,000.00
Part 3
	Statement	Standard	Deluxe	Total
A	Units Sold	175,000.00	25,000.00	200,000.00
B	Contribution Margin @ $10 and $15	1,750,000.00	375,000.00	2,125,000.00
C	Fixed Cost			1,275,000.00
D	Operating income (B-C)			850,000.00
	Statement	Standard	Deluxe	Total
A	Units Sold	175,000.00	25,000.00	200,000.00
B	SP per unit	25.00	40.00
C	Variable cost per unit	15.00	25.00
D	Contribution per unit	10.00	15.00
E	Sales Mix Percentage (120000/200000,80000/200000)	0.88	0.13
F	Weighted Average CM	8.75	1.88	10.63
G	Fixed Cost			1,275,000.00
H	BEP in units (G/H)			120,000.00

Since Delux has a higher contribution margin compared to Standard, which a chage in sales mix where only 25000 units of delux were sold compared to 175000 units of Standard the operatiing income falls to 850000 and the breakeven point in units increses to 120000 from 106250. Thus is benefiial to sell more of delux compared to standard .